Stop notice 3

Arrangement details

The user enters into a Contract of Employment with Company X which provides that the employee will be paid for time worked at the National Minimum Wage (NMW) rate or, if applicable, the National Living Wage (NLW) rate unless otherwise specified in the Employee Assignment Schedule. At the same time the user also enters into a Loan Agreement.; The loan amount is unspecified. Company X (lender) promises to loan certain monies to the borrower (ie, the scheme user) and the borrower promises to repay the principal amount to the lender plus 2% interest above the officialHMRCrate. The loan is said to be repayable within 60 days on written demand from the lender and is secured against ‘any achieved bonus payments’; Users also enter into a ‘Bonus, Incentive or Pay Scheme Offer’ agreement with Company X. The offer invites the user to participate in a bonus scheme where Company X will pay a bonus in the event of the user generating in excess of 170% of their employment cost The bonus paid will be between 100% and 170% of the total employment cost attributable to the user. Company X enters into a contract with end client directly or via an agency. The employee then undertakes work for the end client/agency and submits timesheets either directly to Company X or their agency who pass on the details to Company X.; Company X invoices the end client for work done, then receives payment for services from the end user or agency.; Company X issues a payslip to the user and deduct a management fee of 15% from the gross amount received from the end client as shown in the ‘Company Deductions’ section of the payslip.; Company X payNMWand holiday pay at an hourly rate as outlined in the Contract of Employment. National Insurance contributions (NICs) andPAYEare deducted from theNMW/NLWand holiday earnings.; Company X pay the remaining balance in the form of loan, the terms of which secure repayment against any future bonus or incentive payments arising from the ‘Bonus, Incentive or Pay Scheme Offer’ Agreement users enter into with Company X. No tax orNICsare paid on the loan.